Labor & Employment Law Daily Wrap Up, ECONOMIC NEWS—U.S.: Supreme Court holds Trump lacked authority to impose ‘emergency’ tariffs, (Feb 23, 2026)

By Thomas Long, J.D.

In a 6-3 decision marked by disagreements over the “major powers doctrine,” the Court concludes that Congress did not delegate its taxing power to the President through IEEPA.

The International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs, the U.S. Supreme Court has held in a decision written by Chief Justice John Roberts and joined in substantial part by five Justices. Three of the conservative Justices dissented. The ruling deals a significant political blow to President Trump, who has based much of his economic, fiscal, and foreign policies on his ability to unilaterally impose, retract, raise, and lower tariffs. According to Roberts, the term “regulate” in IEEPA did not encompass the tariff power, which was ordinarily the purview of Congress. Lacking a clear delegation of the taxing power, Trump could not engage in actions reserved for the legislature. The several concurring and dissenting opinions additionally signaled a splintering of views among the justices on the controversial “major questions doctrine”—a principle requiring federal agencies to have clear congressional authorization for actions with high economic or political importance, rather than relying on “ambiguous” statutory language. The three liberal justices, who otherwise joined Roberts’ majority opinion, disagreed that the doctrine was necessary to reach the conclusion that IEEPA did not authorize the challenged tariffs, while Justice Neil Gorsuch wrote a 46-page concurring opinion taking issue with both the liberals and the dissenting conservatives over their different views on the doctrine. The dissenters, for their part, took the view that the IEEPA tariffs passed muster under the major questions doctrine. Dissenters also argued that the majority’s holding could have negative political and economic consequences. In his dissenting opinion, Justice Brett Kavanaugh asserted that the decision could interfere with recent international trade deals that were in part predicated on Trump’s tariffs. The ball is now in Trump’s court for a potential “Plan B”—that is, attempting to justify the tariffs under other statutes—and to carry out any refunds owed to importers who have paid the tariffs (Learning Resources, Inc. v. Trump, No. 24-1287 (U.S. Feb. 20, 2026)).

Trump’s tariffs. The dispute concerned two sets of sweeping tariffs imposed by Trump in response to declarations of national emergencies, for which he claimed to have the power under the IEEPA, 50 U.S.C. §§ 1701-1706. Specifically, Trump invoked Section 1702(a)(1)(B) of IEEPA and concluded that action under other authority to impose tariffs was inadequate. The first set of tariffs stemmed from an emergency declared on Inauguration Day in Proclamation No. 10886, regarding the opiates crisis, specifically the alleged trafficking of fentanyl and other narcotics from Mexico. The scope of this proclamation was later expanded to threats originating in Canada and China. To address these declared emergencies, President Trump announced a series of tariffs referred to as the “trafficking tariffs” in Executive Order Nos. 14194 (90 Fed. Reg. 9117), 14193 (90 Fed. Reg. 9113), and 14195 (90 Fed. Reg. 9121)—imposed duties on Mexico, Canada, and China. Subsequent EOs made various adjustments and changes to these tariffs and variously paused and resumed them. On April 2, Trump, through EO No. 14257 (90 Fed. Reg. 15041), imposed tariffs on imports from nearly every country with which the United States conducts significant trade. Trump again claimed authority under IEEPA to impose these duties, which he called “reciprocal tariffs.”

Court challenges. Two separate cases challenging the tariffs were consolidated and considered by the Court: Learning Resources, Inc. v. Trump,No. 24-1287, and Trump v. V.O.S. Selections, Inc., No. 25-250 (consolidated into No. 24-1287). The first case was brought by two manufacturers of educational toys. They filed suit in the federal district court in the District of Columbia on April 22, seeking declaratory and injunctive relief, citing significant harm to their businesses from the tariffs. The district court granted the plaintiffs’ motion for a preliminary injunction on May 29. The government parties noticed an appeal to the U.S. Court of Appeals for the D.C. Circuit on May 30, which was docketed the same day. On June 17, the plaintiffs then filed a petition for certiorari before judgment of the appellate court. The Court granted review on September 9 and set a relatively quick briefing schedule. The question presented was “whether IEEPA authorizes the President to impose tariffs.”

The second case was initiated by five small businesses and 12 states (led by Oregon), who filed suit in the Court of International Trade (CIT) against the United States and various government officials in their official capacities, challenging the reciprocal tariffs. On May 28, a three-judge panel of the CIT granted summary judgment in favor of the plaintiffs and permanently enjoined the government from imposing the tariffs. On appeal, the Federal Circuit, sitting en banc, held that IEEPA’s grant of presidential authority to “regulate” imports did not authorize the tariffs. Trump and the other government defendants filed a petition for certiorari seeking Supreme Court review, which the Court granted on September 9 and consolidated with the Learning Resources case.

Majority opinion. After summarizing the procedural posture and the legal questions presented by the case, Chief Justice Roberts summed up his reasoning. Wrote the Chief Justice, “Based on two words separated by 16 others in Section1702(a)(1)(B) of IEEPA—‘regulate’ and ‘importation’—the President asserts the independent power to impose tariffs on imports from any country, of any product, at any rate, for any amount of time. Those words cannot bear such weight.”

Power of taxation. Roberts explained that the Constitution gave Congress the power to impose taxes, and a tariff is a form of tax—a tax levied on imported goods and services. “[The Framers] did not vest any part of the taxing power in the Executive Branch,” he said. He also noted that the government had conceded that the President had no inherent authority to impose tariffs during peacetime. Moreover, it did not defend the challenged tariffs as an exercise of the President’s warmaking powers. “The United States, after all, is not at war with every nation in the world," he wrote. The government has relied instead on IEEPA, and its statutory interpretation of the terms “regulate” and “importation,” Roberts explained.

“Major questions.” In a passage joined only by Justices Neil Gorsuch and Amy Coney Barrett, and not by Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson (and therefore not part of the Court’s decision), Roberts discussed the relevance of the major questions doctrine to IEEPA. In his view, the considerations driving the doctrine “apply with particular force where, as here, the purported delegation involves the core congressional power of the purse.” He noted that when Congress had delegated its tariff powers, it had done so in explicit terms and subject to strict limits. This backdrop contradicted the government’s reading of IEEPA “to give the President power to unilaterally impose unbounded tariffs.” Roberts also pointed out that the government’s reading of the statute would mean “the President is unconstrained by the significant procedural limitations in other tariff statutes and free to issue a dizzying array of modifications at will [citation omitted]. All it takes to unlock that extraordinary power is a Presidential declaration of emergency, which the Government asserts is unreviewable.” Moreover, Roberts noted, in the 50 years of the statute’s existence, no President had invoked IEEPA to impose tariffs at all, let alone tariffs as sweeping as those imposed by Trump. Roberts rejected the government’s argument that the major questions doctrine should not apply here because IEEPA addressed “major problems.” He stated, “Accordingly, the President must ‘point to clear congressional authorization’ to justify his extraordinary assertion of the power to impose tariffs (citation omitted). He cannot.”

Meaning of “regulate.” Writing again for the majority of the Court, Roberts interpreted IEEPA’s language granting the President the power to “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit … importation or exportation.” This list of powers did not mention tariffs or duties; in the Chief Justice’s view, if Congress had meant to include those powers, it would have done so explicitly. He rejected the contention that the power to “regulate … importation” filled that void. He asserted that the term “regulate” was not usually thought to include taxation. “The U. S. Code is replete with statutes granting the Executive the authority to ‘regulate’ someone or something,” Roberts reasoned. “Yet the Government cannot identify any statute in which the power to regulate includes the power to tax.” Roberts therefore concluded that IEEPA did not delegate the power to tax; furthermore, such a reading would render IEEPA partly unconstitutional. He noted that IEEPA authorizes the President to “regulate … importation or exportation,” but taxing exports is expressly forbidden by Article I, Section 9, Clause 5 of the Constitution. Roberts rejected the argument that because IEEPA permitted the President to prohibit imports, he could take the less extreme action of imposing tariffs. In Roberts’ view, the power to tax was different in kind, not degree, from the powers listed IEEPA. He concluded that IEEPA did not authorize the President to impose tariffs.

Result. The Court affirmed the Federal Circuit’s decision in V.O.S. Selections. As for Learning Resources, the Court vacated the district court’s judgment and remanded with instructions to dismiss for lack of jurisdiction due to the CIT having exclusive jurisdiction over the case.

Concurring opinion of Justice Gorsuch. Justice Gorsuch wrote separately to express his agreement with Roberts’ application of the major questions doctrine. “Under the doctrine’s terms, the President must identify clear statutory authority for the extraordinary delegated power he claims,” Gorsuch wrote. “And, as the principal opinion explains, that is a standard he cannot meet.” Congress did not, he said, “clearly surrender to the President the sweeping tariff power he seeks to wield” by enacting IEEPA. He also criticized the liberal justices for declining to join the portion of Roberts’ opinion employing the doctrine, as well as the dissenting justices for applying the doctrine but reaching a different conclusion.

Concurring opinion of Justice Barrett. Justice Barrett wrote a short concurring opinion specifically to address Justice Gorsuch’s statements about the major questions doctrine. She quibbled with what she called Gorsuch’s seeming suggestion “that the purpose of the major questions doctrine is something other than to ascertain the most natural reading of a statute.” Citing the late Justice Antonin Scalia, she wrote, “If Justice Gorsuch thinks that we should forgo the most natural reading of a statute because it is preferable for Congress, rather than the President, to make big decisions, that way lies ‘a lot of trouble’ for the textualist.”

Concurring opinion of Justice Kagan. Justice Kagan, joined by Justices Sotomayor and Jackson, took the view that “the ordinary tools of statutory interpretation amply support today’s result,” making it unnecessary to join the Chief Justice’s discussion of the major questions doctrine. “It is not just that the Government’s arguments fail to satisfy an especially strict test; it is that they fail to satisfy the normal one,” she explained.

Concurring opinion of Justice Jackson. Justice Jackson wrote separately to argue in favor of examining legislative history to glean congressional intent, rather than “speculat[ing] needlessly.” In her view, there was evidence in the legislative record that Congress did not intend for IEEPA to authorize the executive branch to impose tariffs.

Dissenting opinion of Justice Thomas. “Throughout American history, the authority to ‘regulate importation’ has been understood to include the authority to impose duties on imports,” stated Justice Clarence Thomas in a dissenting opinion. He argued that IEEPA, as he would interpret it, is consistent with the constitutional separation of powers, positing that power over foreign commerce was not traditionally within the core legislative power. In addition, he wrote that “engaging in foreign commerce was regarded as a privilege rather than a right,” which further supported his opinion that the power to impose duties could be delegated. He then argued that IEEPA’s conditional grant to the President of the power to “regulate” foreign commerce, including “importation” of foreign property, encompasses the power to impose duties on imports.

Dissenting opinion of Justice Kavanaugh. In his dissenting opinion, Justice Kavanaugh contended that IEEPA’s grant of authority to “regulate … importation” includes tariffs, “a traditional and common tool to regulate importation.” Kavanaugh also addressed two short-term complications created by the majority opinion. First, "[t]he United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs,” he wrote, “even though some importers may have already passed on costs to consumers or others." He continued: "A second issue is the decision’s effect on the current trade deals. Because IEEPA tariffs have helped facilitate trade deals worth trillions of dollars—including with foreign nations from China to the United Kingdom to Japan, the Court’s decision could generate uncertainty regarding various trade agreements. That process, too, could be difficult." The Court’s decision, however, might not preclude Trump or future Presidents from imposing similar tariffs or duties in the longer term, Kavanaugh opined. Other statutes—such as Sections 122, 201, and 301 of the Trade Act of 1974; Section 338 of the Tariff Act of 1930; and Section 232 of the Trade Expansion Act of 1962 could provide avenues for the imposition of tariffs by the executive, he said.

The case is No. 24-1287.

Judge: Roberts, J.

Attorneys: Pratik Arvind Shah (Akin Gump Strauss Hauer & Feld, LLP) for Learning Resources, Inc. D. Neal Kumar Katyal (Milbank LLP) for V.O.S. Selections, Inc. Benjamin Gutman, Oregon Department of Justice, for State Parties. John Sauer, U.S. Department of Justice, for Donald J. Trump.

Companies: Learning Resources, Inc. V.O.S. Selections, Inc.

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